Supplier fire isn't just hurting Ford, supply issues are rippling across auto industry

Key Points
  • Supplies of critical auto components are being threatened after a fire at a Meridian Lightweight Technologies plant knocked out its production.
  • The plant uses magnesium casting to make numerous parts for a number of companies.
  • Capacity cannot be easily switched to another facility.
Robots weld together Bayerische Motoren Werke AG (BMW) X4 sports utility vehicle (SUV) body frames at the BMW Manufacturing Co. assembly plant in Greer, South Carolina.
Luke Sharrett | Bloomberg | Getty Images

Ford isn't alone.

Executives from General Motors to BMW are all trying to figure out how long it will take to get production of certain models back to normal as the automakers try to cope with parts shortages following a fire at supplier's facility in central Michigan.

"BMW is working to develop alternative sources for the parts," said Kenn Sparks, head of communications for BMW USA. "The BMW plant in South Carolina has an inventory of parts on hand but until the supply chain stabilizes there will be some interruptions to X5 and X6 production."

It's a similar story at the GM plant in Wentzville, Missouri, just outside of St. Louis. The automaker has suspended production of full-size vans.

Meanwhile, Fiat Chrysler says some production of the Chrysler Pacifica Minivan has also been impacted.

The automakers are hamstrung by the fact that particular parts for certain models are made exclusively by Meridian Lightweight Technologies. Since a sizable portion of Meridian's manufacturing plant has been knocked out due to fire damage, production for some vehicle models has been impacted.

Battery production is Tesla's bottleneck: Analyst

Ford has completely halted production of the F-150 and the Super Duty F-Series pickup truck. It's working with Meridian, while also talking with other suppliers to get critical components flowing again. Until that happens, production stops or slows down.

"For the automakers, this is serious," said one auto industry executive. "The parts shortage will likely be resolved in a couple weeks. Until then, it's touch and go."

Compared to the tsunami that hit Japan in 2011 and knocked out several auto parts suppliers, the Meridian fire's impact on final assembly lines is not as great. Still, it's a reminder how one supplier building specific parts for a number of automakers can cripple product lines if its plant is severely damaged. Adding to the problem is the fact that there are not many suppliers who make molded components with magnesium casting.

"Magnesium casting is not a huge business, so there's not a lot of capacity that can quickly step in and start producing parts," said Kristin Dziczek, vice president of the Center for Automotive Research.

WATCH: Ford backs forecast despite F-150 production halt

Ford reaffirms full-year earnings guidance despite halting production of F-150 models